Surf's up again for Billabong

4th time lucky for this struggling company?

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Perennial takeover target, Billabong International (ASX: BBG) may be finally taken private.

The head of Billabong's United States business, Paul Naude, is considering a potential leveraged buyout of the company. Billabong has given Mr Naude six weeks to discuss his plans with financiers, and has stepped down from his role while he considers the possible deal.

None of Billabong's board or senior management team have any part in Mr Naude's move, and it wasn't solicited by the company.

Related: Why I recently bought Billabong

Billabong has been in the news regularly this year, following two aborted bids by private equity firm TPG Capital, and another abandoned bid by a company believed to be Bain Capital. TPG originally made a $3 per share bid in February, which was upped to $3.30, but both of which were rejected by Billabong's board. TPG and Bain then made separate bids of $1.45 per share in July and September respectively, but both walked away, after completing due diligence.

With just six weeks to discuss his plans with financiers, Mr Naude is going to be busy, as that's not much time. What his plan is for Billabong is unknown, whether he will split it up, sell off brands or assets, or continue on with the company's previously announced strategy. Billabong is closing under-performing stores, reducing its debt, revising its brands, styles and suppliers and cutting costs.

The news comes just days after investment firm, Mariner Corporation Limited (ASX: MCX) made a bid for youth fashion group, Globe International (ASX: GLB). Globe has seen its share price fall from a high of over $6 in 2004, to around 40 cents currently, and has reported falling revenues for years, and shares were trading at a 37% discount to their net tangible asset value.

While the Billabong story has some way to play out, this may not be final scene. As we've seen with Qantas Airways Limited (ASX: QAN) today, when a company's share price has been hammered down by the market, at some price, someone sees value in the company.

If you only invest in one company this year, make it our "Top Stock for 2012-13". Operating in two hot markets — one set to double by 2012, the other predicted to grow 5x over the next five years — this stock is a solid growth play that also boasts strong recurring revenue, zero debt, and lots of cash. Get its name and full research case in this brand-new FREE report.

More reading

Motley Fool writer/analyst Mike King owns shares in Billabong. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »